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HMRC: April resi transactions highest for that month since 2007

HMRC’s provisional non-seasonally adjusted estimate for UK residential transactions in April 2021 was 111,260, the highest total in April since 2007, when transactions were 126,450.
However, this is a drop from the March 2021 figure of 190,980.

Provisional non-seasonally adjusted UK residential transactions in April 2021 increased 197.8% year-on-year, but a substantial amount of this difference is due to the impacts of the COVID-19 pandemic on the April 2020 statistics.

In addition, the non-seasonally adjusted estimate of 392,170 for UK residential transactions during quarter one of 2021 was the highest Q1 total since the introduction of stamp duty statistics in their current format in 2005, and the highest quarterly total since Q2 2006 (419,270).

Due to the pandemic, quarter two of 2020 was the lowest quarterly total for UK residential transactions since Q1 2009.

Provisional estimates of UK residential transactions in April 2021 have shown an impact from the temporarily increased nil rate bands for stamp duty and and Land Transaction Tax (LTT).

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Following year-on-year decreases in April and May 2020 of around 50%, caused by the pandemic, non-seasonally adjusted UK residential transactions have gradually increased, peaking in March 2021 with a provisional estimate of 173,410.

For non-residential transactions, non-seasonally figures in April 2021 increased 94.4% year-on-year, but again this will largely be due to the effects of the pandemic on last year’s data.

Provisional estimates of UK non-residential transactions in April 2021, 10,520 non-seasonally adjusted and 10,160 seasonally adjusted, are similar to levels reported during April in recent years, excluding 2020.

Following yearly decreases in April and May 2020 of around 45% caused by economic effects around the pandemic, non-residential transactions have followed a generally increasing trend during subsequent months.

Joshua Elash said: “Transactions are significantly down from March due to a large number of purchases completing that month in anticipation of the stamp duty holiday expiring.

“It evidences how significant an impact the scheme is having on buyer appetite and confidence.

“April was always going to be softer in terms of number of transactions.

“The annual rebound has, however, been stunning.

“A year ago, the first lockdown bit into the property market hard, and this comeback is nothing short of astonishing.

“All in all, the data continues to support a growing argument that stamp duty should be abolished completely so as to continue to encourage transactions, upward mobility, and to support the economy.”

Mark Harris said: “April’s dip in transactions compared with March is likely to be at least partly due to the anticipated end of the stamp duty holiday, before its extension was announced, which resulted in buyers taking their foot off the gas to get deals done.

“Now that the holiday has been extended, activity has picked up again.

“Compared with April last year, when the housing market was closed to business thanks to the pandemic, there has been a massive 179.5% jump in transactions.

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“That reflects the grinding to a halt of the market, as well as the surge in demand created by COVID, with more people bringing forward moves to the country and a growing desire for more space, both inside and out.

“On the lending front, lenders have plenty of cash and are keen to lend.

“There are some very competitive products, and with Nationwide returning to 95% LTV mortgages at lower rates than its competitors, it is a good time to borrow.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Although these figures reflect many sales agreed several months ago, they show a reduction in activity as many buyers did not expect to still take advantage of the stamp duty holiday.

“However, activity has picked up strongly since the deadline was extended, allowing many to continue where they left off, as well as encourage new entrants to the market.

“Transactions are always a better measure of housing market strength than prices which tend to fluctuate.

“On the ground, supply is still a problem even though listings have improved as rollout of the second jab in particular is encouraging sellers to make their properties available.

“It is not only some sellers who are trying to profit from the home buying frenzy but certain solicitors are charging exorbitant fees to take on work, whereas others are working evenings and weekends to make sure they get over the line in time.”

By Jessica Bird

Source: Mortgage Introducer

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BoE: Mortgage borrowing up by record £11.8bn in March

Mortgage borrowing saw a net increase of £11.8bn in March, the strongest since the Bank of England started publishing mortgage approval data in April 1993.

Lenders approved 82,735 mortgages in March which was down by 5,000 on February’s figure.

Mark Harris says: ’The strength of the runaway housing market is being reflected in the mortgage data, with strong levels of borrowing in March.

“With homeowners borrowing an additional £11.8bn, taking net borrowing to its strongest level since the series began in 1993, those who are not moving are taking the opportunity to improve, with cheap mortgage rates helping them make this decision.

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“With the stamp duty holiday originally expected to end in March, this focused borrowers’ minds and helps explain the uplift in lending. Now that this has been extended we expect activity to continue to be brisk over coming months, particularly as mortgage rates are likely to remain low and with increased availability of high loan-to-value deals.

“The trend to save continues with households depositing an additional £16.2bn in March, despite savings rates at historically low levels. This is an encouraging trend although it will be interesting to see whether it continues to the same extent as lockdown eases further.”

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Richard Pike, sales and marketing director at Phoebus Software, added: “We’re getting used to seeing these types of figures for mortgage approvals. The stamp duty holiday lit the fire and will continue to drive the market until it comes to an end. It is good to see the housing market as buoyant as it is, but it’s also causing some consternation.

“House prices are being driven up, with estate agents reporting many buyers offering over the asking price to secure their preferred property. How sustainable this is, when lenders are tied by strict affordability guidelines, is debatable.

“If the housing market is helping to drive the nations’ recovery in an unsustainable manner, will we be generating problems further down the track? Even with 95% mortgages available again the chances for many younger people, trying to get onto the property ladder, are becoming fewer as prices spiral upwards. At the moment it looks like we’re creating an unlevel playing field, especially for first-time buyers.”

Source: Mortgage Introducer

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House prices up by greatest margin since 2004

House prices rose by 2.1% in April 2021, representing the greatest monthly increase since February 2004, according to the Nationwide house price index.

House prices have reached a new record average high of £238,831, up £15,916 over the past 12 months.

On an annual basis, house price growth rebounded to 7.1% in April, from 5.7% in March.

Nationwide suggested that annual growth in house prices could reach double digits in June if prices are flat over next two months.

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Robert Gardner, chief economist at Nationwide, said: “Just as expectations of the end of the stamp duty holiday led to a slowdown in house price growth in March, so the extension of the stamp duty holiday in the Budget prompted a reacceleration in April.

“However, our research suggests that while the stamp duty holiday is impacting the timing of housing transactions, for most people it is not the key motivating factor prompting them to move in the first place.

“For example, amongst homeowners surveyed at the end of April that were either moving home or considering a move, three quarters said this would have been the case even if the stamp duty holiday had not been extended.

“Housing market activity is likely to remain fairly buoyant over the next six months as a result of the stamp duty extension and additional support for the labour market included in the Budget, especially given continued low borrowing costs and with many people still motivated to move as a result of changing housing preferences in the wake of the pandemic.

“With the stock of homes on the market relatively constrained, there is scope for annual house price growth to accelerate further in the coming months, especially given the low base for comparison in early summer last year.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “The bounce-back highlighted by the Nationwide figures, which we have also seen on the ground, should be sufficient to ensure there is no price correction when the stamp duty holiday starts to taper off at the end of June.

“Continuing shortage of stock, as well as the new government-backed 95% mortgage and furlough support, are providing further assistance for the market.

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“Broader rollout of the vaccine and easing of lockdown restrictions is increasing confidence in the economy.

“This economic recovery is giving an additional boost to housing market activity rather than the housing market supporting the economy, which was the case when the pandemic first struck.”

Tomer Aboody, director of MT Finance, said: “With continuous government support and stimulus, particularly the extension of stamp duty relief, house prices shot up in April.

“Added to this the growing availability of 95% mortgages, and money being cheaper to borrow than ever, it is hard to see what is going to stop the housing market in its tracks this year.

“What the end of the stimulus will bring, we are not certain yet, but with economic uncertainty on the horizon, this artificial bubble could slowly deflate. That is the best-case scenario.

“The biggest factor is the lack of properties to buy, which is creating and overwhelming the pursuit of houses with gardens, which in turn is pushing up pricing.

“Will the government look to modify the stamp duty for downsizers in order to release more properties onto the market?

“This, along with the changing social environment with more flats being built in the centre and city of London, means a big cultural shift in society is on the horizon.”

By Jake Carter

Source: Mortgage Introducer

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Stamp Duty Land Tax transactions in Q1 up 48% annually

The total number of Stamp Duty Land Tax (SDLT) transactions in Q1 2021 was up 48% annually, according to HMRC data.

On a quarterly basis, the number of transactions was up 1%.

The increase in transactions in the last three quarters has likely been impacted by the introduction of the SDLT holiday for residential properties, helping offset the decrease caused by COVID-19.

Residential property transactions in Q1 2021 were 2% higher than in Q4 2020, and 53% higher than in Q1 2020.

Non-residential property transactions in Q1 2021 were 7% lower than in Q4 2020, and 6% higher than in Q1 2020.

Total SDLT receipts in Q1 2021 were 8% lower than in Q4 2020 and total SDLT receipts in Q1 2021 were similar, up 1%, to those in Q1 2020.

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The change in receipts has mainly been caused by the introduction of the SDLT holiday.

Residential property receipts in Q1 2021 were similar, within 1%, to both Q4 2020 and Q1 2020.

Non-residential property receipts in Q1 2021 were 24% lower than in Q4 2020, but 4% higher than in Q1 2020.

Up to Q2 2020 there were 540,900 claims that have benefited from the relief, and the total amount relieved by these claims is £1,294m over the period.

An estimated total of 65,300 transactions were liable to HRAD in Q1 2021, with the 3% element generating £285m in receipts, an decrease of 16% from the previous quarter, and a fall of 15% compared to Q1 2020.

The percentage of residential receipts from HRAD transactions has dropped slightly by 3% to 46% when compared to both Q3 2020 and Q4 2020.

Vikki Jefferies, proposition director at PRIMIS Mortgage Network, said: “Today’s figures show a clear increase in Stamp Duty Land Tax transactions over the first quarter, underscoring the fact that the mortgage industry is continuing to recover from the impact of the COVID-19 crisis.

“There is no doubt that the Chancellor’s decision to extend the stamp duty tax break in his Budget announcement helped to fuel this activity by stimulating buyer appetite and boosting demand.

“As we approach the tapered extension of the stamp duty holiday, the priority for the mortgage market will be processing cases quickly and efficiently so that borrowers are able to benefit from the tax cut.

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“In order to achieve this, key players in the market, including lenders, advisers, distributors, housebuilders, surveyors and conveyancers should work collaboratively to ensure that clients are best supported during this period and that the application process is as smooth as possible for all involved.’’

Cloe Atkinson, managing director at Mortgage Engine, added: “Today’s figures show once again just how frenzied activity in the housing market is.

“The release of pent-up demand for property has been super-charged by the stamp duty holiday extension.

“The tax holiday has certainly been a success by any metric and current activity levels are further proof of the resilience of brokers, lenders and borrowers alike.

“Over the last year, the virus has forced the industry to re-shape the way consumers buy property and led to a great deal of adaption and innovation to overcome the difficult conditions caused by the pandemic.

“Technology has been important for all parties in transitioning to this new way of completing purchases and the industry has seen a large increase in the use of tech solutions, such as remote viewings and automated valuation models.

“As the UK looks forward to the return of some pre-pandemic normality, tech-driven solutions will continue to be a vital part of the success of the mortgage market.

“A lot of progress has been achieved in the last year when it comes to tech adoption, but the industry needs to be ambitious and continue to build upon this momentum to provide better outcomes for its consumers.”

By Jake Carter

Source: Mortgage Introducer

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Residential transactions show full steam ahead for housing market

The seasonally adjusted estimate of UK residential transactions in March 2021 was 190,980, 102.3% higher than March 2020, according to the latest HMRC Property Transaction data.

On a monthly basis, the figure rose by 32.2%.

The seasonally adjusted estimate of UK non-residential transactions in March 2021 was 12,530, up 53% year-on-year and 24.5% on February.

The HMRC data found that the non-seasonally adjusted estimate of UK residential transactions in March 2021 was 180,690, 107.9% higher than March 2020 and 49.6% higher than February 2021.

For UK non-residential transactions in March 2021, HMRC found the non-seasonally adjusted estimated was 14,160, 59.2% higher than March 2020 and 61.6% higher than February 2021.

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Dave Harris, chief executive of more2life, said: “Today’s findings demonstrate the resilience of the UK housing market.

“Some of the activity in March will no doubt have been fuelled by the ‘race for space’ as homebuyers increasingly prioritise home offices and gardens over the convenience of access to the city centre, but the Chancellor’s extension of the stamp duty holiday will have fuelled buyer appetite as well.

“The reduction in stamp duty has also prompted older borrowers to release the equity in their homes to move to a new house or to purchase a second property.

“At more2life, we have seen the proportion of over-55s using equity release to fund property purchases triple from 5% to 15% in recent months, showing just how essential the Chancellor’s tax break has been in funding people’s ambitions and lifestyle changes during the pandemic.

“We expect this trend to continue in the months running up to the end of the holiday and encourage equity release lenders and advisers to work together when processing cases in order to meet growing consumer demand as efficiently as possible.”

Jonathan Stinton, head of intermediary relationships at Coventry Building Society, added: “These figures show that it’s still full steam ahead for brokers and the property market.

“It’s clear that the extension of the stamp duty holiday has added fuel to keep the train moving in March, and it’s on track for a great April too with plenty of demand across the board.

“This of course means that brokers have been, and will be, very busy supporting their clients, so it’s a good idea to look for ways to stay on top of things.

“Our web chat tool, for example, is a great way for brokers to get answers to policy queries fast – our team can usually respond within a minute.”

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Cloe Atkinson, managing director at Mortgage Engine, said: “March’s data shows there’s still a healthy level of activity in the market, reflecting the high levels of demand from buyers, boosted by the extension of the stamp duty holiday.

“The figures are further proof that the housing market has adapted well to operating efficiently during the pandemic.

“Brokers, lenders, and borrowers have learned how to successfully navigate the difficult conditions caused by lockdown restrictions.

“Tech-driven solutions have been a vital part of this success, allowing many parts of the housebuying process to be completed entirely remotely.

“As pandemic restrictions in England begin to ease, it’s vital that the industry doesn’t lose sight of the benefits these tech solutions can bring.

“While many people are dreaming about a return to the normality of life pre-pandemic, the mortgage industry should be more ambitious.

“As the post-pandemic recovery begins, the industry should focus on building upon the tech adoption of the last year and innovating further to ultimately provide better outcomes for all involved.”

By Jake Carter

Source: Mortgage Introducer

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Residential transactions remain high as SDLT holiday deadline is approaching

The number of UK residential transactions, on a seasonally adjusted basis, rose by 24.1% between January 2020 and January 2021, according to the latest property transactions data by HMRC.

This annual rise comes as the stamp duty holiday deadline fast approaches on the 31 March.

Despite the annual rise, on a monthly basis the number of residential transactions dropped by 2.4%.

Looking to the number of non-residential transactions in the UK during January, this figure fell 8.2% year-on-year to 8,980.

In addition, between December 2020 and January 2021, the number of non-residential transactions declined by 3.6%.

The provisional non-seasonally adjusted estimate of UK residential transactions in January 2021 was 98,830, 17.9% higher than January 2020 and 25.2% lower than December 2020.

Furthermore, the non-seasonally adjusted estimate of UK non-residential transactions in January 2021 was 7,680, 14.6% lower than January 2020.

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The data also shows that the level non-residential transactions was 28.0% lower than December 2020.

Mike Scott, chief analyst at Yopa, said: “New figures from HMRC show that the number of home purchases completed in January was still very high, as buyers rushed to beat the 31 March stamp duty deadline.

“We expect that the number of purchases will remain very high until March, and then drop off for a few months before returning to normal.

“The year as a whole is likely to see a higher number of purchases than in recent years, perhaps as high as 1.3 million.

“The housing market has remained open during the recent and current lockdowns, but many people are still waiting for life to return closer to normal before they make their next move.

“After a brief slowdown in the second quarter after the stamp duty holiday ends, we anticipate a very active housing market in the second half of this year.”

David Whittaker, chief executive of Keystone Property Finance, added: “Today’s figures suggest that home buyers who are unlikely to make the stamp duty holiday deadline are taking a ‘wait and see’ approach to purchases, delaying applications until the Chancellor providers greater clarity over the future of the tax holiday.

“However, despite the uncertainty, second properties are making up a significant proportion of the continued rising demand.

“Data from Hamptons International reveals second home sales increased by 58% in January 2021 compared to the same month last year.

“This follows a period of buoyancy in the buy-to-let market as landlords look to expand their portfolios, while taking advantage of an increasing number of buy-to-let products on the market.

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“However, being a landlord brings with it a series of challenges, not least the recent and upcoming regulatory and tax changes.

“Qualified advice from mortgage brokers is crucial in helping landlords to navigate the market and access the right mortgage for their unique circumstances.”

Nick Barnes, head of research at Chestertons, said: “Following a record December, the sales market has maintained momentum throughout January 2021.

“Compared to January last year, Chestertons registered 9% more instructions, indicating that sellers remain keen to move home.

“This is further highlighted by a 47% year-on-year increase in properties currently on the market.

“Equally, we have agreed 27% more sales, largely driven by house hunters rushing to meet the stamp duty holiday deadline but also possibly reflecting a desire to beat any potential shutting down of the housing market as proposed by the Labour party.

“In spite of lockdown restrictions, there are still plenty of households who are keen to move, which is further boosted by the roll-out of the vaccine.

“Boris Johnson’s announcement of the slow easing of lockdown restrictions might bring a new spark to the housing market as people are eager to return to some form of normality.

“So far in February, Chestertons has seen a 73% increase in sales compared to the same period in February 2020.”

By Jake Carter

Source: Mortgage Introducer

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